Sellers confirm initial methanol Q1 contract settlements at €320/t

03 January 2012 16:05  [Source: ICIS news]

LONDON (ICIS)--A major methanol supplier and a major producer, both based in Germany, confirmed first-quarter methanol contract settlements with three buyers at €320/tonne ($416/tonne) FOB (free on board) Rotterdam on Tuesday.

These settlements represent a €5/tonne increase on the fourth-quarter contract price of €315/tonne FOB Rotterdam.

Three major buyers remain unwilling to follow this initial number and continue to target a rollover.

Major buyers said that the economic climate is not conducive to price increases and are keen to highlight the decrease in downstream demand they are facing.

However, sellers say an increase is needed to keep the contract price constant in dollar terms due to weak euro/US dollar exchange rates.

In addition, sellers believe Europe is underpriced when compared to the US and Asian regions, which could result in fewer imports arriving into the European market.

"Europe cannot afford to be discounted to other regions,” a major producer said.

The source added the price hike of €5/tonne is an insufficient increase and numbers will need to firm further in the coming months.

A major Scandinavian producer has yet to announce its first-quarter contract settlement outcomes, while global producer Methanex posted its independent methanol contract price for the first quarter at €320/tonne FOB Rotterdam during December 2011.

($1 = €0.77)

By: Sarah Trinder
+44 20 8652 3214

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